Woodhouse v.

Halili

Woodhouse entered into a contract with Halili wherein they will organize a partnership for thebottling and distribution of
Mission softdrinks

- Woodhouse acts as industrial partner; Halili as a capitalist

- Halili decides matters of general policy; Woodhouse attends to operation and development of the bottling plant
- Woodhouse secures Mission Soft Drinks for and in behalf of the partnership

Woodhouse informed Mission Dry Corp of LA that he had a financier willing to invest half a million dollars in bottling and
distribution. Woodhouse requested the right to bottle and distribute for a limited time.

Negotiations began. Woodhouse and Halili went to the US to sign an agreement between Mission Dry and Woodhouse
and/or Halili

They returned to the PH and began operating. In January 1948, Woodhouse was given an advance of 2k, another 2k the
next month. When the bottling plant wa already in operation, Woodhouse demanded the execution of partnership papers.
Halili said no hurry, wait until sales hit 50k.

- After it did, wala pa rin. Halili refused to give futher allowances to Woodhouse.

No settlement was arrived at. Case was filed by Woodhouse.

- Prays for exec of contract of partnership, accounting, 30% share.

Halili answer:

- Consent to the agreement was secured by Woodhouses representation that he was the owner of an exclusive
bottling franchise which was FALSE. Plaintiff did not secure the franchise.
- It was plaintiff who failed underatkings
- Did not contribute an exclusive franchise.

SC: While Woodhouse misrepresented that he has exclusive franchise from Mission Dry, this is not the fraud that warrants
vitiation of consent.

- He had a 30 day option which expired. He informed Halili that he had authority when he only had option. It is
improbable that he said he only had option, and that it had expired, because he would lose bargaining power.
- Agreement contained: manager is ready and willing to allow the capitalists to use the exclusive franchise and
that franchise will be reassigned to the manager
- Statements confirm Halili was made to believe Woodhouse was exclusive grantee
- When he learned in Cali that he did not have excl franchise, Halili reduced pWoodhouses participation
- But this does not vitiate consent
o It was not dolo causante, but dolo incidente
o Principal consideration was the ABILITY to get the exclusive franchise
o In the draft, the word used was capitalist. But this was amended to reflect partnership
o Halili believed that Woodhouse had the excl franchise, which would be transferred to the partnership
o However, he did not have it when the contract was perfected.
- Guilty of dolo incidente
o He used the fact of owning excl franchise to get a bigger share in the profits. Incidental matter to the
agreement

May the agreement be carried out? YES

 - Evident that they would form a partnership at a later date. From the time they went to Cali, Woodhouse already
demanding execution of the partnership agreement
- He cannot claim it was fait accompli
- Defendant may not be compelled against his will to carry out the agreement/execute partnership papers
o Accdg to Spanish civil code: Obligation to do, not to give
o Law recognizes individuals freedom to do an act he has promised to do, or not to do it
o Courts may not compel performance

JUDGMENT APPEALED FROM AFFIRMED.